How Teams Can Stretch Their International Budgets

As with any rule in baseball, when the the new bonus spending limits for international signings became public in November 2011, people immediately started looking for ways to work around them.

Aside from paying money under the table, one of the ways for teams to spend more than their $2.9 million allocation (last year’s limit) without having to face penalties was to sign a player from a trainer before July 2 as an advance payment for that trainer’s current prospect. Since the inaugural bonus pools didn’t kick in last year until July 2, teams could throw unlimited money at players and trainers before that.

This year things are a little bit different because the 2012-13 spending limit is in place, and this year’s spending limits will be variable for each team. But the same advance payment method is something teams could try if they have money remaining in their 2012-13 pool. The current signing period ends on June 15, and then there will be a “closed period” when teams are not allowed to sign any international players until the 2013-14 signing period begins on July 2. There is no rollover of pool space, so on June 15 it is gone forever.

What a team could do (or could have done at any point) is use remaining money in its current pool to essentially pay a trainer now for one of his 2013-14 players. This might be a particularly appealing option for one of the 10 teams with a pool of less than $2 million for 2013-14–the first year with varying budget limits. Teams were assigned budgets based on theoretical draft slots this year (even though there is no international draft), and 22 teams have less pool space in 2013-14 than the $2.9 million MLB gave every team for 2012-13.

When Baseball America pointed out last year that teams could use this method to get around the bonus pools, a senior Major League Baseball official said the league would view such a practice as an attempt to circumvent the bonus pools and would respond with penalties. It’s not clear how MLB could realistically apply such a penalty, however.

Last year several teams had Venezuelan shortstop Franklin Barreto ranked as the No. 1 international prospect for July 2 and expected he would command $2 million. Yet his $1.45 million bonus from the Blue Jays wasn’t the highest in Latin America (the Mets gave Dominican shortstop Amed Rosario $1.75 million) or even in Venezuela, where lefthander Jose Castillo got $1.55 million from Tampa Bay.

In March 2012, the Blue Jays signed lefthander Jonathan Torres for $520,000, the biggest bonus for any Venezuelan player signed in 2012 before July 2. Like Barreto, Torres also trained with Ciro Barrios, and their combined bonuses were $1.97 million. Several teams said they did not consider Torres to be a high-level prospect, while the Blue Jays said they saw Torres touch 93 mph as a 17-year-old but said he had an arm issue after he signed. Torres pitched in 11 games (four starts) last year in the Rookie-level Dominican Summer League, where he posted a 4.29 ERA with 24 strikeouts and 21 walks in 21 innings.

But teams and scouts have always tended to sign players from the same trainers or agents, for reasons that have nothing to do with bonus pools. The Blue Jays have signed a slew of Barrios’ players in recent years, including $1.3 million outfielder Wuilmer Becerra, $700,000 outfielder Jesus Gonzalez and $400,000 righthander Jesus Tinoco in 2011 alone. Plenty of other teams have similar patterns with other trainers.

“If I sign a guy tomorrow for $600,000,” one international director said last year, “how are they going to tell me that I don’t view him as being worth $600,000? They can’t prove that. That’s my scouting department’s opinion. So there’s no way they can stop that loophole.”

It’s also hard to see why MLB would expend a lot of energy investigating such deals because the bonus pools already restrain aggregate spending on international amateurs.

In a market where the agents and trainers, rather than the players and their families, are often the key decision-makers, moving money around to make sure the trainers are taken care of seems a likely practice. Doing package deals would be up to each team, trainer and theoretically the players and their families, and it would allow teams to get a deal done and save money in their 2013-14 pool.